Free tool
Contractor margin calculator
Enter your real cost, labor, and target margin. See the price you should charge — and the gross profit you'd keep. No signup needed.
This is the math BidRite runs on every job — plus overhead recovery, EBITDA, and a flat-rate price book. Get BidRite →
Want the 1-page markup vs margin cheat sheet?
Drop your email and I'll send the plain-English cheat sheet that keeps you from underbidding. No spam, ever.
Markup vs margin — the mistake that underbids jobs
What's the difference between markup and margin?
Markup is profit as a percent of your cost. Margin is profit as a percent of the price you charge. They're not the same: a 100% markup is only a 50% margin. If you set prices thinking in markup but quote thinking in margin, you leave money on every job.
How do I price by target margin?
Add your real cost (material + labor + overhead), then divide by (1 − your target margin). Example: $420 cost at a 45% target margin → $420 ÷ 0.55 = $764. Gross profit = $344.
Why include overhead in the cost?
Rent, truck, insurance, phone, and software don't bill themselves. If you don't recover overhead per billed hour, a "profitable" job can still lose money once the month's fixed costs land. BidRite bakes overhead recovery into every quote.
Does BidRite do this automatically?
Yes — on every job, live, plus EBITDA per job, effective $/hr, and a flat-rate price book so you're not doing this math in the truck. Try it free.
Stop guessing what to charge.
One job priced right pays for months. HVAC price book included.
Get BidRite — $49/mo